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1st Chinese automaker in US to open Calif. plants

By JOHN ROGERS Associated Press

Posted:
05/01/2013 01:46:54 AM MDT

Updated:
05/01/2013 03:36:55 PM MDT

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Mayor R. Rex Parris of Lancaster, Calif., and Stella Li, president of BYD Motors, take a demonstration ride on an electric bus at the announcement of the opening of an electric bus manufacturing plant by the Chinese firm BYD, in the Southern California city of Lancaster Wednesday, May 1, 2013. BYD, known as Build Your Dream, is a major producer of batteries and electric vehicles in China.

LANCASTER, Calif.—The first Chinese-owned vehicle manufacturer in the United States unveiled ambitious plans Wednesday to eventually build as many as 1,000 plug-in electric buses a year at a refurbished RV manufacturing plant in a wind-swept, sage-dotted corner of the Mojave Desert.

In a news conference on a patio outside BYD's new energy-efficient production facility, the company's senior vice president, Stella Li, said the first of 10 zero-pollution vehicles, already on order from the city of Long Beach, should roll off the assembly line next year.

Within two years, Li said, BYD Motors expects to be producing 50 buses a year, and it will continue to ramp up production, hoping to reach the plant's capacity of 1,000 buses a year within a decade or two.

All the buses will be powered by the company's own iron-phosphate batteries, which will be manufactured at another plant near the bus factory in Lancaster, 60 miles east of Los Angeles. BYD is the world's largest manufacturer of rechargeable batteries.

"Today is a very special day for us," Li said. "Today marks the first time a Chinese vehicle company opens a vehicle manufacturing plant in the United States."

She said after the news conference that BYD has invested more than $10 million in the two plants, declining to give a more specific figure. When the vehicle plant reaches full production, she said, it could employ as many as 1,000 people.

BYD's North American headquarters in Los Angeles currently employs about 40 people but will also grow as bus production does, Li said.

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She expects it will add engineers and people employed in marketing, distribution, and research and development.

Since it was founded with 20 employees in 1995, BYD Co. Ltd., has grown to employ 150,000 people across China and in offices in Europe, Japan, South Korea, India, Taiwan, Hong Kong and elsewhere. Among its investors is U.S. billionaire Warren Buffett.

The company, which got into the automobile business 10 years ago, has been looking to expand into the U.S. market for some time.

Although China has surpassed the U.S. as the world's largest auto market, Chinese manufacturers have seen domestic sales inhibited by the popularity of cars from the United States and Japan, and they've been looking to expand elsewhere.

"It's well known that Chinese manufacturers have been eyeing the North American market for years," said U.S. auto industry analyst Michael Robinet, managing director of IHS Automotive in Northville, Mich. "It's probably the most important market from their perspective," he said.

But Robinet said it's not an easy one to crack, thanks to the need to establish a dealership network, fluctuations in international currency and the volatility and competitiveness of the market itself. So it makes sense that BYD would try to gain a foothold by building its vehicles on American soil as a means of controlling price and quality, he said.

At one point, BYD, which stands for Build Your Dreams, had hoped to introduce its e6 model electric passenger cars to the U.S. by 2010, but has since pushed back those plans. Li said after Wednesday's news conference that the company still hopes to eventually market the cars to taxi fleets in the U.S., but she couldn't provide a timeline.

"My plan is 10-year, 20-year," she said of expansion plans, before adding with a laugh: "My target is as soon as possible. My target is I wish we could do it tomorrow."

BYD says its buses can travel 155 miles between charges with a full load of passengers and with the air conditioning on. They are powered by three battery packs with a life of 20 years, said BYD Vice President Michael Austin. That means they should outlast the vehicle itself.

Each bus has 34 passenger seats but has enough standing room to accommodate 60 riders. BYD hopes to sell them to cities, transit agencies and school districts at a price of $100,000 to $200,000 per bus.

Li said BYD officials settled on Lancaster for their first U.S. production facility largely because of the influence of the city's flamboyant mayor, R. Rex Parris, who visited the company's headquarters in Shenzhen not long after being introduced to BYD executives in 2008.

"Every time we met, he was not talking about, 'Put it here or here or here,'" she said of locating the company's plant. "He was talking about creative technology. I was very impressed."

Parris, better known nationally for opening City Council meetings with a prayer, shutting down a hotel where a motorcycle gang was to meet and requiring pit bulls to be castrated, is also a long-time advocate of green technology and developing local trade relations with China.

He successfully pressed the City Council earlier this year to adopt an ordinance requiring that all new homes come with a solar energy system beginning in 2014.

In 2010, he brokered a partnership with BYD and Southern California homebuilder KB Home, which produced a prototype home with a solar-energy system that produces more energy than an average family would consume. That same year, he also persuaded the City Council to hire a Hong Kong native as Lancaster's China trade liaison.

"It's not just about jobs," Parris said of landing the plant in Lancaster, although he quickly added he was happy to get them. "It's about solving global warming."

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